Friday, June 19, 2009

Brown Thursday

"Regulation of City may be handed to Brussels" writes Bruno Waterfield.

Hopes that Gordon Brown would make a stand against the European Commission's financial regulatory proposals, which could see control over the City transfer from London to Brussels, appear to be fading, he tells us.

In The Times, however, we get a little more detail. Brown, it appears, has agreed common EU rules for financial supervision but has refused to accept the new EU financial regulators should have the power to order governments to bail out struggling banks and other bodies.

This still represents a substantial transfer of power to Brussels as there will now be "a single rulebook" of standards for all European financial institutions. And, while the regulators lack the "nuclear option" – for now – they will have powers to oversee and investigate the cross-border banking, insurance and pensions, and securities sectors, and to mediate in disputes between member states.

As you would expect, though, The Independent put a positive spin on this expected defeat, proclaiming: "Brown wins EU battle to keep crisis-hit banks under UK control".

This paper is telling exactly the same story as the others but is typical of the Europhile tendency, talking up a temporary interruption in the torrent of EU measures and playing down the substantial erosions of power that have taken place.

In The Guardian, we see exactly the same trick being played, this time the headline reading: "Brown wins independence from European banking regulator". He has done nothing of the sort, of course – simply warded off the assumption of EU-wide emergency power – but the headline looks reassuring enough for the readers to go back to sleep.

In a few days time, this will be history as far as the media are concerned, leading the commission free to work up its detailed legislation without scrutiny or interference.

The full effects, however, will not be felt for many years but when the City has noticeably slid into obscurity at least we can say we knew when it started and who was at the helm. After Black Wednesday, we now have Brown Thursday.